Submitted by Tyler Durden on 09/03/2015 - 20:35
Russian President Vladimir Putin has introduced legislation that would deal a tremendous blow to the U.S. dollar. If Putin gets his way, and he almost certainly will, the U.S. dollar will be eliminated from trade between nations that belong to the Commonwealth of Independent States. In addition to Russia, that list of countries includes Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan and Uzbekistan. Obviously this would not mean “the death of the dollar”, but it would be a very significant step toward the end of the era of the absolute dominance of the U.S. dollar. Most people don’t realize this, but more U.S. dollars are actually used outside of the United States than are used inside this country. If the rest of the planet decides to stop accumulating dollars, using them to trade with one another, and loaning them back to us at ultra-low interest rates, we are going to be in for a world of hurt. Unfortunately for us, it is only a matter of time until that happens.
The IMF Warns Again – The IMF has cautioned the Fed and other central banks about any tightening of policy in the current environment. That’s the IMF’s second warning to the Fed.
The World Bank has also warned against a Fed move as has former Treasury Secretary, Larry Summers. Many prominent traders have also cautioned against a move. Among them are Stan Druckenmiller (below) and Jeff Gundlach.
The Shanghai stock exchange, which has been creating global stock market convulsions while trimming 39 percent off its value since June, will be closed for the next two days. The Chinese holiday started on Thursday in Beijing with a big parade and show of military might to commemorate the 70thanniversary of V-Day and the defeat of Japan in World War II.
The massive military pageantry and display of weaponry was widely seen as a move by President Xi Jinping to reassert his authoritarian rule in the wake of a sputtering domestic economy, $5 trillion in value shaved off the stock market in a matter of months, and the need to devalue the country’s currency on August 11 in a bid to boost exports.
Submitted by Tyler Durden on 09/03/2015 - 20:10 As Xi and Putin stand proudly before the parade of China's military might and Chinese navy ships enter the Bering Sea for the first time ever, President Obama is busy doing other things just a few hundred miles away...
Europe's Refugee Crisis "Out Of Control", Hungary PM Rages "This Is A German Problem, Not An EU Problem"Submitted by Tyler Durden on 09/03/2015 - 20:25 The current refugee crisis is not an EU problem, but rather "a German problem," according to Hungary's Prime Minister Viktor Orban as his nation's borders are swamped with foreigners seeking to travel on to Germany. "People in Europe are full of fear because they see that the European leaders are not able to control the situation," he exclaimed after a meeting with EU President Schultz. He is right, of course, as we detailed here and here, but the sheer scale of the tragedy is worst than many could imagine. Orban defended his decision to erect a fence along its southern border with Serbia, saying: "we don’t do this for fun, but because it is necessary," adding rather pointedly that his country was being "overrun" with refugees, most of whom, according to the prime minister, were not Christians.
Submitted by Tyler Durden on 09/03/2015 - 22:05 The narrative of the omnipotent central banker continues to be questioned with China's inability to save its own market the latest incarnation of investors losing faith. Nowhere has the religious zealotry been more fervent than in trading Japanese stocks where Abe and Kuroda have broken every independent rule in their manipulation of wealth-giving stocks. However - it appears their time is up, as Bloomberg reports, foreigners dumped 1.43 trillion yen of Japanese equities in the three weeks through Aug. 28, Tokyo Stock Exchange data updated Thursday show. That’s the most for any three-week span on record, overtaking the period when Bear Stearns Cos. collapsed in 2008.
Submitted by Tyler Durden on 09/03/2015 - 21:30 There is no doubt that the Chinese economy is in a material economic slowdown. Policy officials’ aggressive actions and scare tactics against equity short sellers could continue to cause capital flight. However, this does not mean that China is going to sell large quantities of Treasuries. There is too much co-dependency between the US consumer and Chinese exporter. Destabilizing the US Treasury market with large sales would be tantamount to shooting themselves in the foot.
The 2030 Agenda: This Month The UN Launches A Blueprint For A New World Order With The Help Of The PopeSubmitted by Tyler Durden on 09/03/2015 - 20:55 Did you know that the UN is planning to launch a “new universal agenda” for humanity in September 2015? That phrase does not come from us – it is actually right in the very first paragraph of the official document that every UN member nation will formally approve at a conference later this month. The entire planet is going to be committing to work toward 17 sustainable development goals and 169 specific sustainable development targets, and yet there has been almost a total media blackout about this here in the United States.
Submitted by Tyler Durden on 09/03/2015 - 20:35 Just as the machines had learned the "Buy when Japan opens" signal, Japanese leaders unleash their usual stream of utter tripe and break the bid. Tonight's chosen member was Japanese Economy Minister Amari who said "it is important for markets to act calmly, not move in a volatile manner," adding "stock markets are not reflecting fundamentals," reflecting on the fact that G-20 ministers had discussed China and "monetary tightening was likely in some advanced countries." This sparked a plunge in USDJPY and an instant 100-point plunge in Dow futures.
Submitted by Tyler Durden on 09/03/2015 - 19:45 Ignorance of economics allows some very big falsehoods to be accepted as fact by large numbers of people. And it’s only going to get worse as the presidential election of 2016 unfolds.
Submitted by Tyler Durden on 09/03/2015 - 19:15 Turkey has cracked down on press "freedom" and whipped the public into a "terror" paranoia frenzy ahead of new elections set for November. The bottom line: while the Western media is preoccupied with China's censorship and stock market selloff witch hunt, a NATO member is busy nullifying a democratic election outcome and instigating a civil war, all in the pursuit of political power and all with Washington's explicit blessing.
Submitted by Tyler Durden on 09/03/2015 - 18:50 Through the 20th century, the people of the West built up a very high compliance inertia. They complied with the demands of authority and taught their children to do the same, until it became automatic. People obeyed simply because they had obeyed in the past. Authority quickly became addicted to this situation, basing their plans on receiving every benefit of the doubt. Automatic obedience, however, is a brittle thing. Economies of scale are failing, the money cartel has been exposed, government schools have lost respect, mass media is fading away, and the game continues because the populace is distracted and afraid. And that will not last forever. The ‘walls’ of reflexive compliance are growing thinner. Any serious break may ruin the structure.
FX Traders Fear "Worst Case Scenario" For Brazil As FinMin Cancels Travel Plans, Rousseff Meets With LulaSubmitted by Tyler Durden on 09/03/2015 - 18:24 The situation in Brazil is deteriorating rapidly after finance minister Joaquim Levy canceled a G20 appearance in Turkey (irony) and convened a meeting with embattled President Dilma Rousseff. FX traders fear a worst case scenario involving Levy's exit. Meanwhile, former President Luiz Inacio Lula da Silva is en route to Brasilia tonight to meet with Rousseff one-on-one.
Submitted by Tyler Durden on 09/03/2015 - 18:00 Now that we’re in the classic “crash season,” the situation only looks worse. This season technically started in mid-August, and won’t end until mid-October. This is not to say the chaos won’t continue later on into the end of this year. It just means the worst decline, this first wave down, is likely to come in the next several weeks. So consider this current bounce a gift. The signs are all there that this global bubble is done. Use this time to get out of any passive investments in stocks.
Bridgewater's 'All-Weather' Fund Goes Negative For 2015 After Risk-Parity's Worst Quarter Since LehmanSubmitted by Tyler Durden on 09/03/2015 - 17:24 The $80 billion Bridgewater All Weather Fund, a risk-parity model managed by hedge fund titan Ray Dalio, was down 4.2% in August, according to Reuters citing two people familiar with the fund's performance. This leaves the fund down 3.76% for 2015 as the frameworks for these funds are forced mechanically to reposition as correlations and volatilities across asset classes break down. Just as we saw in the summer of 2013's Taper Tantrum, the last 2 weeks have seen 4 to 5 sigma swings in daily returns and 'generic' risk-parity funds have suffered the biggest 3-month losses since the financial crisis.
Submitted by Tyler Durden on 09/03/2015 - 17:09 To answer the question: yes, the US recession is hiding just under the "question mark" at the unexplained and perplexing divergence between industrial production, and actual end sales all of which result in a record inventory stockpiling which as we showed before, is what recently boosted Q2 GDP to an unsustainable 3.7% growth rate.
Submitted by Tyler Durden on 09/03/2015 - 16:49 "There is no reason to embarrass the president of China..."
Submitted by Tyler Durden on 09/03/2015 - 16:25 The REAL RISK currently is not missing some of the upside if the bull market does begin to resume, but rather catching the downside if this correction turns into a full-fledged bear.
Submitted by Tyler Durden on 09/03/2015 - 16:06
Submitted by Tyler Durden on 09/03/2015 - 15:50 Friend.. or Foe?
Submitted by Tyler Durden on 09/03/2015 - 15:35 "...we live in an age in which the policies of the past are coming to an end. The Keynesian model does not work, and our Empire does not work. This total failure has to change, and we need to present the alternative."
Submitted by Tyler Durden on 09/03/2015 - 15:25 "... we estimate that only about half (or slightly more than half) of total technical selling was completed to-date (mostly completed by VT funds, half by CTAs, and a smaller fraction by RPs). We estimate that a further ~$100bn of selling remains to be completed over the next 1-3 weeks. As a result, we expect elevated volatility and downside price risk to persist."
Submitted by Tyler Durden on 09/03/2015 - 15:25 Back in early 2014, when IRS director Lois Lerner pleaded the Fifth, it became clear that not all is well with the official narrative. Fast forward to this week when another prominent democrat caught up in another email scandal has just indicated they would plead the Fifth. And no, its not Hillary Clinton, at least not yet, but her former staffer, Bryan Pagliano, who oversaw her private email server. As reported by Politico, he too plans to invoke his Fifth Amendment right not to answer incriminating questions before the House Benghazi Committee, according to a letter his lawyer sent the panel.
Submitted by Tyler Durden on 09/03/2015 - 14:49 While the market nervously eyes the petrodollar reserves of Saudi Arabia and the UAE as the countries juggle domestic expenditures, dollar pegs, and the cost of war, Yemen itself is coming apart at the seams - literally. As WSJ reports, it now looks as though the country may in fact split, as Aden residents have eschewed the red, white and black for the flag of South Yemen, which existed as an independent republic for more than two decades.
Submitted by Tyler Durden on 09/03/2015 - 14:32 We live in a Fiat economy where growth is fuelled by debt, and less and less from productivity and demographics. This takes place in a closed circuit with the US dollar as the reserve currency. The problem now is that the economy can not get restarted without changes to one or several parameters. Simply put, this fiat economy is unsustainable and must change, and we must adjust to slower growth and start actually producing.
Submitted by Tyler Durden on 09/03/2015 - 14:14 Leading Republican presidential nominee Donald Trump appears to have just gone 'all-in'...
*TRUMP SAYS HE'S SIGNED PLEDGE NOT TO RUN AS 3RD PARTY CANDIDATE
And while he was at it, he took a jab at Hillary as "the worst secretary of state in the history of the world." . Maybe The Economist is on to something.
Submitted by Tyler Durden on 09/03/2015 - 14:10 "The opening of the new units will feed an artificially created confrontation. [This is] the logic of the Cold War. It runs counter to genuine interests of the European and regional security." - Alexander Grushko, Russian ambassador to NATO.
Submitted by Tyler Durden on 09/03/2015 - 12:52 For years, many had mocked both European and US stress tests as futile exercises in boosting investor and public confidence, which instead of being taken seriously repeatedly failed to highlight failing banks such as Dexia, Bankia and all the Greek banks, in the process rendering the exercise a total farce. The implication of course, is that regulators, thus central bankers, openly lied to the public over and over just to preserve what little confidence in the system has left. Now we know that this is precisely the policy intent: as Reuters reports citing a paper co-authored by a Bundesbank economist, "banking supervisors should withhold some information when they publish stress test results to prevent both bank runs and excessive risk taking by lenders."
In other words: lie.
Submitted by Tyler Durden on 09/03/2015 - 12:36 How did the world manage to go from one acute crisis to mutliple acute crises in the space of seven years despite trillions in central bank asset purchases, you ask? Here's the crisis contagion roadmap to help explain.
In the early days of central banking, one primary objective of the new system was to take ownership of the public’s gold, so that in a crisis the public would be unable to withdraw it.
Gold was to be replaced by fiat cash which could be issued by the central bank at will. This removed from the public the power to bring a bank down by withdrawing their property. A primary, if unspoken, objective of modern central banking is to do the same with fiat cash itself.
September is here. As expected, market volatility is increasing. The Great Zombie War is intensifying. And investors are getting scared. On Tuesday, the Dow lost 470 points – a nearly 3% drop. Bloomberg:
“U.S. stocks joined a worldwide sell-off, after equities’ worst month in more than three years, amid continuing concerns that China’s slowdown will weigh on the global economy.
‘The problem is, as much as China is the catalyst for this, it’s also that we’re seeing weakness in fundamentals here,’ said Matt Maley, an equity strategist at Miller Tabak & Co LLC in New York.
‘A lot of company earnings were hurt by China in the second quarter and it’s only gotten worse. People are losing confidence with the whole situation there breaking down, not just in the stock market but in data as well.’”
One of the country’s top gun control groups, The Coalition to Stop Gun Violence, is telling its members to break the law and put the lives of police officers and gun owners on the line. In their latest attempt to push their crazy anti-gun agenda, The Coalition to Stop Gun Violence is urging its members to start calling 911 on anyone who is conceal carrying or open carrying a firearm in public.
The radical gun control group posted the message on their Facebook page, asking people to essentially break the law, since they are trying to trick emergency service into thinking there is a critical life-threatening emergency. The tactic, something known as Swatting, is putting not only law abiding gun owners and police at risk, but anyone who is on the scene when these police officers arrive.
“The most effective way to destroy people is to deny and obliterate their own understanding of their history. […] He who controls the past controls the future. He who controls the present controls the past.” – George Orwell, 1984
Common Core and similar corporate-driven efforts to alter education are starting to have some serious consequences.
Rewriting history is a major part of the silent takeover that is and has been underway for some time.
My fellow stackers and friends, I am in the sound studio today but monitoring the markets, of course, and noticed a classic reversal in Silver and wanted to let you know it is going on as I write!
NOTICE THAT GOLD APPEARS UNAFFECTED!
Gold is being depressed as Silver is being readied for this week’s kill shot.
Get ready for that jobs report Friday!
I have not checked to see if there is big economic news before Friday. Of course, we have constant news now of an ominous FED rate hike in about 2 weeks.
“How much is enough?” — Bud Fox “It’s not a question of enough, pal. It’s a zero sum game, somebody wins, somebody loses. Money itself isn’t lost or made, it’s simply transferred from one perception to another.“ — Gordon Gekko (Wall Street).
Jason Goepfert at SentimenTrader: “Traders in the Rydex family of mutual funds panicked. To the greatest extent in 20 years, they’ve shifted more assets out of the bullish index funds and into the bearish inverse funds relative to their long-term trends…